Interim report for Q2 2020/21 and the half-year
(1 October 2020 to 31 March 2021)
Ambu’s revenue increased organically by 6% in Q2 and by 20% in the half year driven by the rapid growth of our Visualization business. The revenue from our portfolio of single-use endoscopes (Visualization) grew 17% on top of 69% growth last year. Full-year outlook maintained.
“Halfway into the financial year, we’re in a strong position to reach our full-year expectations. As focus on infection control continues to increase, we’re building our superior ecosystem consisting of the most advanced and comprehensive single use endoscopy portfolio. We’re excited with the progress of our recent launches and we have achieved important milestones to strengthen our infrastructure, including the groundbreaking for our new single-use endoscopy plant in Mexico,” says Juan Jose Gonzalez, CEO of Ambu.
Highlights for the quarter
Comparative figures for Q2 2019/20 are stated in brackets.
- Revenue for Q2 was DKK 1,001m (DKK 989m) based on organic growth of 6% (24%). Reported growth for the quarter was 1% (26%). Organic growth for the half-year was 20% (19%) with reported growth of 15% (21%).
- Sales in North America grew organically by 6%, while we saw organic growth in Europe of 2% and in Rest of World of 18%. Organic growth rates for the half-year were: North America 9%, Europe 34% and Rest of World 14%. Growth rates are significantly influenced by the high comparables for Q2 2019/20, which was the beginning of the first wave of the COVID-19 pandemic.
- Visualization achieved double-digit organic growth of 17% on top of 69% last year. For the half-year, Visualization achieved organic growth of 48% (49%).
- Sales of single-use endoscopes reached 379,000 units for the quarter and 749,000 units for the half-year. Sales volumes were thus up 21% and 52%, respectively, relative to last year.
- Anaesthesia and PMD continued to be negatively impacted by COVID-19. Anaesthesia declined by -4% (3%), and Patient Monitoring & Diagnostics (PMD) declined by -7% (-6%). For the half-year, Anaesthesia was flat at 0% (5%) and PMD declined by 5% (1%).
- For the aScope Duodeno, we have continued our commercial launch and engaged with targeted hospitals including the largest ERCP centers in the USA. The upcoming US reimbursement for inpatient single-use duodenoscopy procedures is expected to accelerate the transition to single-use products. Therefore, we have decided to strengthen our product performance by making rapid upgrades to the aScope Duodeno ahead of the expected inpatient reimbursement approval in October 2021. Half of the upgrades are available in the market now, and we expect the remaining upgrades to be implemented in Q4 2020/21, effectively upgrading the aScope Duodeno to a version 1.5.
- Gross margin for the quarter was 62.2% (61.4%). The gross margin for the half-year was 63.8% (60.8%) and is positively impacted by high growth in Visualization, which contributes a margin well above the average for Ambu’s portfolio.
- Capacity costs for the quarter totaled DKK 523m (DKK 457m), corresponding to an increase of 14%. The increase reflects our investment in commercial infrastructure and innovation activities. Capacity costs for the half-year were up 26%.
- EBIT for the quarter was DKK 100m (DKK 150m) with an EBIT margin of 10.0% (15.2%), while for the half-year EBIT ended at DKK 248m (DKK 243m) with a margin of 12.3% (13.9%).
- Net working capital-to-revenue ratio was 19% (23%) by the end of the quarter based on rolling 12-month revenue.
- Free cash flow before acquisitions totaled DKK -27m (DKK -89m) for the quarter and for the half-year DKK -25m (DKK -279m).
- Total net interest-bearing debt (NIBD) was DKK 466m (DKK 1,446m), corresponding to a leverage of 0.7 (2.6). The lowering of debt is the result of the 1.86% capital raise and the sale of treasury shares carried out in January.
- The outlook for the 2020/21 financial year as announced in the annual report on 11 November 2020 is unchanged and as follows:
- Organic growth in the range of 17-20%
- EBIT margin before special items in the range of 11-12%
- Sales of single-use endoscopes of 1.3-1.4 million units
A conference call is held today, Wednesday 12 May 2021, at 10.00 (CEST). The conference is broadcast live via ambu.com/webcastQ22021. The presentation can be downloaded immediately before the conference call via the same link. To ask questions in the Q&A session, please call one of the following numbers five minutes before the start of the conference: +45 3544 5577 (DK), +44 333 300 0804 (UK), +1 631 913 1422 (US), and enter the following access code: 66323014#